What is Strategic Supplier Management?
Sapience Analytics’ Khiv Singh recently shared his thoughts on how a data-driven foundation is key to the practice of cognitive outsourcing which fuels Strategic Supplier Management. Which begs the question, what is Strategic Supplier Management?
Michael Massetti, formerly an Executive Partner with Gartner, has written extensively on this topic and offers up the following explanation: Not all strategic suppliers become partners. The strategic partner occupies the elite position at the top of the supply base hierarchy.
Per Massetti, the following traits define the overarching tenets of a strategic partnership: vision & strategy, values, investment, planning & management systems, communications, risk, and reward. The first two elements are the basis for “Why” to have a partnership. While the remaining five characterize the “How” to manage the partnership.
“Why” have a partnership
While both companies must approach joint activities with a common vision and strategy, comprehensive business planning and management must also be in alignment. It’s vital to establish the resources involved, the milestones for the key activities, and responsibilities of both parties. Without this, partnerships can suffer from misaligned expectations and when issues do surface, an inability to easily resolve them.
“How” to manage the partnership
As well, Massetti says a high degree of collaboration is required for supplier and customer to be mutually successful. This implies a structured and managed approach to communications and engagement across all dimensions of the relationship. Open, transparent, and strong cross-functional engagement between the partners is as important as the contractual and formal aspects of long-term performance and value contribution.
The adoption of new technologies to support improved efficiency and drive greater value in outsourcing operations has been upon us for some time, but today a successful outsourcing strategy must find the balance between efficiency and experience – ensuring the best possible outcomes from the perspectives of cost, cycle time and quality of work enabled via the right combination of man and machine.
By interweaving technologies such as people analytics into outsourcing operations, companies can gain insights necessary to orchestrate the most innovative strategies. These innovations will drive sustainable growth and shareholder value from outsourcing relationships.
You can read the full article from Khiv here.